Analysing the efficiency of diversified farms: Evidences from Italian FADN data

Based on data drawn from the national section of the EU Farm Accountancy Data Network (FADN) database, the study investigates the efficiency of a panel sample of Italian farms practising other gainful activities. An output oriented Data Envelopment Analysis is performed for each year from 2012 to 2017. A second step of analysis is carried out by using the Malmquist Index in order to analyse inter-temporal productivity changes and to decompose its variation into three components, that is, the variations in pure technical efficiency, the variation in scale efficiency and the technological progress for every two years. Results show there is much room for improving the performances of diversified farms, even when considering the variability observed among farms in terms of efficiency scores and across the investigated period. Some variables at contextual and farm levels ? farm?s location and size? relate to the efficiency performances of diversified Italian farms. Over the investigated period of time, the technological change supports farms? performances and contrasts some situations of low managerial efficiency.

Automated summary

The study found that there is much potential for improvement in the efficiency of diversified Italian farms, even considering the variability in efficiency scores among farms and over time. Factors such as farm location and size were found to be related to the efficiency performances of these farms. Additionally, technological change supported farm performances and addressed instances of low managerial efficiency during the investigated period.